Learn From the Nutella Scandal

The power to make changes in popular products now lies with consumers not manufacturers.

One of the classic branding errors of all time was when Coca-Cola touted a recipe change (aka “New Coke”) which resulted in so much consumer uproar that the company was forced to immediately release “Coke Classic” with the old recipe.

The irony of that situation was that Coca-Cola, like all consumer food products, had been periodically tweaking its recipe for decades. “New Coke” only became a problem because the company unwisely used a tweak as the hook for a branding campaign.

Ever since then, Coca-Cola and its counterparts never announce their recipe tweaks and nobody seems to notice, even when the new products taste quite different. But that’s all changing because of social media.

Case in point: the sweetened hazelnut cocoa spread Nutella recently changed its recipe and nobody noticed (as usual) until an independent laboratory in Germany announced that, according to its testing, the Nutella recipe had changed.

Back in the day, this kind of lab report would go virtually unnoticed. A newspaper or two might report the story but most Nutella consumers would never notice and thus continue eating the product with their taste buds none the wiser.

In today’s social media-rich world, the story immediately hit the radar (#NutellaGate) of Nutella’s huge worldwide fan base, forcing the company to admit the recipe change, creating even more bad publicity.

The threat of a similar brouhaha leaves manufacturers of highly-popular products in a difficult situation. Recipe changes, which are usually well-tested, help companies keep products profitable (by replacing expensive ingredients) and appealing to new customers.

Given that everything they do is now transparent, how can manufacturers make recipechanges without anger their loyal customers. The only viable solution is to get the consumers to participate through crowdsourcing.

Here’s how that would have worked for Nutella. Rather than changing the recipe secretly, they should have asked its fan base to see if they can help make Nutella even better. Here’s the tag: “Can something taste better than perfect? Let’s find out.”

Consumers who registered would be sent a test kit with two packets, one with the current recipe and the other with the new recipe, unlabeled of course. The company would publicly post a running total on the results, milking the horse-race for additional publicity.

Expensive? Sure. But inevitable, too. If you want your customers to be enthusiastic evangelists (and that’s a good thing) you must now include them in your most basic decision-making processes. Focus groups aren’t good enough; it’s got to be the Real Thing. (Get it?)

Up to this point, I’ve been discussing the situation in terms of two very established, highly-visible global brands. However, there are important lessons here for startups, too.

The dumbest mistakes that any entrepreneur can make are 1) thinking that they know more than their customer and 2) believing they can scrimp on quality to become profitable. For startups as well as huge brands, it’s the customer who’s in control, even more now than in the past.